Compiling car loan documentation is not an easy process. If this is the first time you are applying for this service, it can be even overwhelming.
Some of the required documentation may seem confusing and frustrating, but it doesn’t have to be that way. With the 411 Drives checklist of car loan documents, you will complete this process quickly and easily.
What documents do I need for a car loan?
First, and foremost, let’s look at all the papers you need to provide to be eligible for a car loan, such as:
- Identity proof
- Age proof
- Income proof
- Residence proof
- Credit history
- Signature proof
These documents are mandatory when applying for a car loan if you are an employee in a company.
However, if you are a self-employed professional, you will also have to provide documents that either proves you are the owner of a business or show your continuity as a freelancer in a certain field.
Now, let’s break them down to better understand exactly the documents you need for car loans.
1. Proof of identity
The first thing you will have to provide when applying for a car loan with 411 Drives is identity proof. In this case, the procedure is simple.
You only need to show a valid form of identification, such as your ID card, your passport, or your driving license.
2. Proof of age
To be able to loan a car, you must have the legal age to drive one. Here, you only need to provide a valid driving license, which should specify your birth date as well.
In some cases, even having a copy of your birth certificate with you might help.
3. Proof of Income
One of the most important documents that make you eligible for a car loan is proof of income. The company lending you a vehicle requires you to provide clear proof of employment that guarantees you will be able to pay back the loan.
You may have to provide at least the two most recent pay stubs from your place of employment. If you receive your salary as an automatic deposit, you will have to present the receipts for the last two deposits.
The lender may also require information about your employment history and your annual income to determine if you are an honest payer.
If you are self-employed, you will have to provide at least one year’s tax returns to appease the car lending company.
4. Proof of Residence
The lender will also ask you to provide proof of your residence. The company will need a valid address where they can contact you if you ever miss or delay payments.
Again, your ID card or your driver’s license should suffice to complete this part of the car loaning process.
5. Credit History
Loaning a car means the trading of significant value from the lender to your temporary possession. Therefore, the lending company will take all the necessary measures to ensure that you are an honest debt payer and that they are not giving a precious asset to someone who has a bad record of paying back loans.
As a result, you will have to provide your full name, social security number, and date of birth. With these details, the lender will contact the appropriate authorities to obtain descriptive information about your credit history.
6. Vehicle Information
Another important document that you need to provide to 411 Drives is a copy of the buyer’s agreement or sales agreement from the dealer.
Among the information that you need to provide include:
- The make and model
- The mileage
- The condition of the vehicle
Additionally, you will have to present the legally binding agreement confirming all of that relevant data along with the terms of the sale-the purchase price and that the seller is willing to make the deal with you.
There are two kinds of papers you may have in this situation. First, if you aim to purchase the car from a dealer, they will automatically provide you with a form including all the data above.
On the other hand, if you want to purchase the vehicle from an individual, both of you will have to write and sign a bill of sale.
Last, but not least, you will have to obtain the title to the vehicle to which the lending company will add its name as a lienholder, and thus retaining the title that is issued in your name until you pay off the loan on the car.
7. Proof of Insurance and License
To complete the documentation necessary to apply for a car loan, you will have to provide valid insurance on the vehicle. This document can be a copy of the insurance policy or simply a document confirming that you are about to purchase an insured car.
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